Hershey expects to cut 15% of global workforce

Hershey Co. has eight factories outside the U.S. As of December, it employed 16,300 full-time and 1,680 part-time workers worldwide.

Photo: Charlie Riedel, STF

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A mixture of Hershey's chocolates is displayed in the company's Times Square store, Wednesday, March 1, 2017, in New York. Hershey expects to cut its global workforce by about 15 percent, with the reductions ... more

A mixture of Hershey's chocolates is displayed in the company's Times Square store, Wednesday, March 1, 2017, in New York. Hershey expects to cut its global workforce by about 15 percent, with the reductions coming mostly from hourly employees outside the United States. The Pennsylvania company also trimmed its forecast for long-term sales growth to between 2 percent and 4 percent, down from the previous 3 percent to 5 percent. (AP Photo/Mark Lennihan) less

Photo: Mark Lennihan, STF

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Hershey's Kisses are displayed, Wednesday, March 1, 2017, in New York. Hershey expects to cut its global workforce by about 15 percent, with the reductions coming mostly from hourly employees outside the United ... more

Hershey's Kisses are displayed, Wednesday, March 1, 2017, in New York. Hershey expects to cut its global workforce by about 15 percent, with the reductions coming mostly from hourly employees outside the United States. The Pennsylvania company also trimmed its forecast for long-term sales growth to between 2 percent and 4 percent, down from the previous 3 percent to 5 percent. (AP Photo/Mark Lennihan) less

Photo: Mark Lennihan, STF

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Customers visit Hershey's store, Wednesday, March 1, 2017, in New York's Times Square. Hershey expects to cut its global workforce by about 15 percent, with the reductions coming mostly from hourly employees ... more

Customers visit Hershey's store, Wednesday, March 1, 2017, in New York's Times Square. Hershey expects to cut its global workforce by about 15 percent, with the reductions coming mostly from hourly employees outside the United States. The Pennsylvania company also trimmed its forecast for long-term sales growth to between 2 percent and 4 percent, down from the previous 3 percent to 5 percent. (AP Photo/Mark Lennihan) less

Photo: Mark Lennihan, STF

NEW YORK - Hershey says it expects to cut its global workforce by about 15 percent, with the reductions coming mostly from hourly employees outside the United States.

The Pennsylvania-based maker of Reese's, Kit Kat and Twizzlers also pared its long-term sales growth forecast to between 2 percent and 4 percent, down from the previous 3 percent to 5 percent. Hershey, which gets the majority of its revenue from North America, attributed the lowered expectations to "changes in U.S. shopping habits" and challenges overseas.

The job cuts, which could come to about 2,700 workers, are part of Hershey's plan to improve its operating profit margin over the next three years, and the company said it will share more details on the measures later. Other major packaged food makers including Coca-Cola Co., General Mills and Kellogg Co. have been slashing costs as sales growth has slowed.

During a meeting with analysts in New York on Wednesday, Hershey CEO Michele Buck noted that the chocolate and candy category is nevertheless well positioned because it is "highly impulsive" with "expandable consumption."

And she noted that the company plans to benefit from the snacking trend in the U.S. that has people eating more frequently throughout the day.

Already, Hershey has been trying to transform its portfolio of products to better take advantage of that behavior, particularly as people look for snacks that promise some sort of nutritional benefit.

For instance, the company recently introduced "snack mixes" that include its chocolates and ingredients like nuts and pretzel balls. It also acquired a meat jerky company in response to the demand for snacks with protein, and it said it will look for other acquisition opportunities.

J.P. Morgan analyst Ken Goldman said he believes many of the job cuts announced by Hershey will come from Shanghai Golden Monkey, a Chinese candy company Hershey acquired in 2014. Hershey has reported declining chocolate sales at its China business in recent quarters, and Goldman called the acquisition "largely disappointing."